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And examples of Singapore Office Space here
Hong Kong, which currently has the most expensive office space in the world, is experiencing a severe shortage, which has made some companies move to rival Singapore, fund manager MGPA told Reuters.
Simon Treacy, the Group Chief Executive of MGPA told the news outlet: “Unlike Singapore, Hong Kong has not managed its land supply well. Vacancies are very low in Hong Kong and rents are rising.
“Some international banks will more actively consider Singapore as the area where they’ll expand, so on a net-net basis, Singapore’s growth will outpace Hong Kong.”
The sky-high rents in Hong Kong as well as the difficulty in finding space are also a factor in the equation.
In the second quarter of this year, rents in the former British colony rose to a historical high of HK 120 per square foot for office space in the downtown Central district.
Savills’ Senior Director of Research and Consultancy, Simon Smith, who is based in Hong Kong, told the Straits Times that the increase had been so marked due to
“mainland initial public offerings, growth in the financial services sector and also the demand from mainland (Chinese) institutions”.
Commercial roperty consultant CB Richard Ellis has stated that only a small amount of office space is expected to become available in Hong Kong this year, as opposed to Singapore, where more than three million square feet of office space will come onto the market this year.
In comparison, Hong Kong will be able to offer only 1.3 million square feet, with almost none of it in the central business area.
Editor’s notes: In Q1 2023, Hong Kong’s Central District was the most expensive location to rent office space in the world with a gross rent (net effective rent plus additional occupancy costs) of USD 259 per square foot for prime office space.
According to JLL’s Premium Office Rent Tracker, Singapore was the 11th most expensive place to rent office space at USD 110 per square foot for the equivalent space.
At the end of 2022, Hong Kong’s office vacancy rate stood at 14.4 per cent however due to increased office leasing activity rental levels were anticipated to rise by as much as 5 per cent over 2023.
During the same period, Singapore’s office vacancy rate stood at 4.4 per cent.